Portage Place and Parkade for Sale?

Portage Place can stir up some raw emotions in Winnipeg. As a mall it has been barely hanging on. The Vancouver-based owner has few ways to make real money there and no incentive to do anything. Why? Because they don't own the land or the parking lot.

The parking lot and other parts of the land earn the The Forks, owner of the parkade, a whopping $3 million a year. In 1994, The Forks was borrowing money just to pay staff. It is not a stretch to say Portage Place saved The Forks and made it what it is today.

There is 1000 parking spaces at Portage Place and they are used all the time. At Jets and Moose game and concerts, the place is packed and customers pay premium parking. It is a cash cow. And the milk has gone to The Forks. In 2017, The Forks started charging for parking at its parkade and then surface parking lots. The parkade is around 300 cars. Forks Market is around another 100 around meters and Railside has just shy of 600. No recent tally of how much parking brings in at The Forks takes in but let's say it is significant. It may even be more than Portage Place takes in given we're talking about almost the same amount of spaces.

And that is fine. Some people said they will never go to The Forks again if they have to pay for parking. Seems pretty drastic and raises the question of whether their boycott is in effect for sports, concerts and the like where free parking may be difficult to find in proximity to an event. I won't even go into hospital parking and its costs. Suffice to say it is unavoidable if you drive a car. Build 2000 spaces for parking and you will find people park free all day. Like The Forks once had happening.

In any event, The Forks now has two revenue streams...North Portage parking and Forks parking. And life is good. However, they also have two mandates which is to promote and develop not just The Forks but North Portage. To that end, North Portage has been neglected.

The owner of the mall, Peterson Group from Vancouver, bought the mall for around $20 million from Consolidated who bought it for around $45 million from Cadillac Fairview who built it for $92 million. That is quite the depreciation since 1987. Still the mall stumbles along. It has a number or stores that service the businesses in the Monday to Friday day hours. The food court which has been the source of scorn and danger makes money. However, the owner has NO incentive to do more.

There have been some conversion of retail into offices. That has helped. However, the west and east pads atop the mall remain undeveloped because any business or hotel would want to have parking. And that is owned by The Forks. Moreover, the land is not even owned by Portage Place. It is also owned by North Portage/Forks. Portage Place only has a long term lease and agreement to turn everything over for $1 after it expires.

The Forks has no interest in investing in Portage Place as they don't own it. And the present owners are not interested in buying the lease out. They just want out. Winnipeg may only get to know after the weekend what's what as a closed door session with the city in planned with the major principals involved.

It is quite possible that what we'll here is that someone is interested in buying Portage Place, the parking lot and the lease. If this is the case, it is likely to trigger a major investment atop the two pad of Portage Place. A hotel, presumably a new Westin, will go up on the east side and offices or residential units or both will go up on the west side. The food court is toast. A hotel lobby, meeting rooms and ballrooms are likely to take up the first three floors. The overpasses will be preserved as well as the mall corridor. If residential goes up, I suspect we see a grocery store go up. A street presence and patios is no doubt a possibility.

Assuming a hotel goes up, the rear drive behind Portage Place will be the obvious valet pick-up/drop off and check-in space. The whole dynamic behind the building changes to serve two potential towers. A new owner would know that $3 million would be coming in annually just from the parking. That's a lot of lettuce.

How do we know this will work? It works because this is exactly what happened with Winnipeg Square parking. The 900 spaces there made oodles of money for the city. When they sold the parking lot, it was an incentive for a owner to own both the tower, the mall and the parking lot together. Lots of incoming cash. Enough for the owner to completely re-do the building and then plan for Winnipeg's tallest tower, a new gym and a grocery store (if the renderings are accurate) on the two unused pads behind Trizec tower. One can make an argument that CityPlace also was more lucrative for any owner because of the parkade inside.

This looks to be the biggest obstacle to seeing Portage Place be something different than how it is viewed now. A new owner can make money and do things with the property. No, it won't result in the whole building being torn down. No, it won't result in housing for below $1000 a month. But we will see changes that have density, serve new business and public access needs and probably more people living right on site. And very likely a less hostile street presence.

And let's not forget...there will be millions from the sale of the parking lot. Everyone and their dog will want a say on it. Not all of it should be sent to The Forks. It should be well planned out with the goal of bringing self sufficiency and prosperity to both the areas it was created to serve.